Mortgage Modification FAQs

Mortgage Modification FAQs

What is a mortgage modification?

A Mortgage/Loan Modification is where your existing lender agrees, through a series of negotiations and paperwork, to change the terms of your loan.  A Mortgage Modification may:

(1) bring you current on your mortgage
(2) reduce your interest rate
(3) reduce the amount of your mortgage debt
(4) extend the term/period you have the repay the loan; and/or
(5) reduce your mortgage payment.

In short, a Loan Modification helps you keep your home.

If I have been told that I do not qualify for a mortgage modification, might I actually really qualify for a mortgage modification?

You might actually qualify. First, it is possible that the law/program has changed since you applied and yo might now apply. Second, the person that told you that you did not qualify might have simply been wrong. Finally, under Washington’s Foreclosure Fairness Act, you may be entitled to a modification that you might not be entitled to otherwise (the FFA gives you extra protections). Yes, you might still qualify.

How many different types of mortgage modification plans are there?

MANY.  Here is a list and link to a lot of them.

FHFA (“Federal Housing Finance Agency”) Streamlined Modification

http://www.fhfa.gov/webfiles/25068/StreamlinedModInit32713Final.pdf

Streamlined Modification (Fannie Mae GSE)

https://www.fanniemae.com/content/announcement/svc1305.pdf

Streamlined Modification (Freddie Mac GSE)

http://www.freddiemac.com/singlefamily/service/streamlined_modification.html

Federal MHA (“Making Home Affordable”) Options – All

http://www.makinghomeaffordable.gov/programs/view-all-programs/Pages/default.asp

HAMP Tier 1 (non GSE)

 https://www.hmpadmin.com/portal/learningcenter/docs/presentations/mhaservicerwebinar_stdaltwtrfall_presentation.pdf

HAMP Tier 2 (non GSE)

https://www.hmpadmin.com//portal/learningcenter/docs/presentations/mhaservicerwebinar_HAMP1_presentation.pdf

HAMP PRA (Principle Reduction Alternative)

http://www.makinghomeaffordable.gov/programs/lower-payments/Pages/pra.aspx

HAMP (nonGSE) 2MP (2nd Lien Modification Program)

http://www.makinghomeaffordable.gov/programs/second-mortgage-help/Pages/default.aspx

 HAMP (Fannie Mae GSE)

https://www.fanniemae.com/content/faq/home-affordable-modification-program-faqs.pdf  (Note: No Tier 2)

HAMP (Freddie Mac GSE)

http://www.freddiemac.com/singlefamily/service/mha_modification.html  (Note: No Tier 2)

FHA-HUD HAMP

http://portal.hud.gov/hudportal/HUD?src=/hudprograms/fhahamp

http://www.makinghomeaffordable.gov/programs/lower-payments/Pages/fha-hamp.aspx

FHA-HAMP  Second Lien Program (FHA2LP)

http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/fha2lp.aspx

VA HAMP

http://www.makinghomeaffordable.gov/programs/lower-payments/Pages/va-hamp.aspx

USDA HAMP

http://www.makinghomeaffordable.gov/programs/lower-payments/Pages/rd-hamp.aspx

HAUP (Home Affordable Unemployment Program)

http://www.makinghomeaffordable.gov/programs/unemployed-help/Pages/up.aspx

“IN HOUSE” Modifications

These are modifications offered by individual entities.   You have to ask them for information on their particular program.   Many mimic the HAMP program.

Foreclosure has started on my home; Can I still get a modification?

The time to get one done is less but, YES, it might still be possible.   You need to contact us ASAP to check your options.

Can I file a bankruptcy and still qualify for a modification?

Absolutely.  It can be a little tricky at times, but it can be done.  We have Chapter 13 clients that modify their mortgage while they are in the Chapter 13.

Will I still qualify for a mortgage modification if I have bad credit?

Yes, your credit rating has very little, if anything, to nothing to do with a modification.  If you were going to refinance with a third party, yes, your credit rating would potentially matter.  But a modification just rewrites the debt you have with the current lender. Also, sometimes a bad credit score might help with mortgage default options.

How long does a mortgage modification take?

It takes months.  We have had several that have taken two years or more.   It will normally take at least six months or so.  But, yes, it can take longer.

Are free mortgage modification services available?

Yes, low income people may qualify for free legal assistance at the NW Justice Project.   Free modification assistance can also be found at the Community Housing Resource Center in Vancouver, Washington.